HIGHER DISCOUNT RATE.
CAPITAL LEAVING GERMANY. EFFECTS OF POLITICAL CRISIS. LONDON. June 11. The Ueichsbank lias raised the discount. rale from 5 to 7 per cent., owing to the demand for foreign currency, caused by scaremongering, which amounted yesterday to £10,000,000. The interest rate lias been advanced from 6 to 8 per cent. Meanwhile the flight of capital is increasing. II is estimated that since June £25,000,000 has been withdrawn from Germany. Dr. Luther, president of the Reichsbank, has appealed to the other banks to check the (light. He points out that £525,000,000 of foreign investments lias already left the country.
The Berlin bank rate was increased from 4 to 5 per cent, on October 9. That change, which was contrary to the general movement of monetary rates, was attributed to special circumstances operating against Germany, causing a depletion of gold and foreign exchange reserves, a condition that had persisted ever since the elections in September. The Berlin rate was 7 per cent, from November 2, 1929, to January 13, 1930.
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New Zealand Herald, Volume LXVIII, Issue 20900, 16 June 1931, Page 9
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171HIGHER DISCOUNT RATE. New Zealand Herald, Volume LXVIII, Issue 20900, 16 June 1931, Page 9
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